Sensex Drops Over 500 Points, Nifty Near 13,800 On Weak Global Cues

The Indian equity benchmarks staged a gap down opening on Thursday on the back of weak global cues ahead of expiry of January futures and option contracts due later in the day. The Sensex fell as much as 589 points to hit an intraday low of 46,821 and Nifty 50 index was hovering around its important psychological level of 13,800. Asian shares slid on Thursday while the safe-haven dollar rallied as a sudden sell-off on Wall Street and delays with coronavirus vaccines shook investor optimism about an early recovery for the global economy.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.2 per cent, with valuations looking stretched given the index had risen more than 6 per cent just this month.

Overnight, Wall Street suffered its biggest one-day percentage drop in three months on Wednesday; The Dow Jones Industrial Average fell 633.87 points, or 2.05 per cent, to 30,303.17, the S&P 500 lost 98.85 points, or 2.57 per cent, to 3,750.77 and the Nasdaq Composite dropped 355.47 points, or 2.61 per cent, to 13,270.60.

Weak global markets, expiry of January futures and option contracts and traders lightening their positions ahead of the Union Budget on February 1 is leading to selling pressure on Dalal Street, analysts said.

Sixteen of 19 sector gauges compiled by the BSE were trading lower led by the S&P BSE Finance index's 1.5 per cent drop. Banking, realty, auto, IT, power and metal shares were also facing selling pressure.

On the other hand, energy and oil & gas stocks were outperforming in an otherwise weak session.

Mid- and small-cap shares were relatively outperforming their larger peers as S&P BSE MIdCap index fell 0.42 per cent and S&P BSE SmallCap index declined 0.55 per cent.

Power Grid was top Nifty loser, the stock fell 2.3 per cent to Rs 188. HDFC Bank, Sun Pharma, Kotak Mahindra Bank, Dr Reddy's Labs, UPL, Tech Mahindra, Nestle India and HDFC also fell between 1.5-2.3 per cent.

On the flipside, Axis Bank rose over 1 per cent to Rs 640 after it reported December quarter earnings.

Reliance Industries, ONGC, BPCL, NTPC, Hero MotoCorp, Coal India, Adani Ports, Bajaj Finance and Shree Cements were also among the gainers.

The overall market breadth was negative as 1,219 shares were declining while 833 were advancing on the BSE.

(With inputs from Reuters)